Urgent Question: Greek bail-out

Videos of yesterday’s Urgent Question debate on the Greek bail-out and any British contribution. Mark Hoban, the Financial Secretry at the Treasury, conveniently sidestepped giving straight answers to straight questions and at times looked very uncomfortable, giving rise to the thought that the Treasury doesn’t know its @rse from its elbow.

Despite later Treasury assurances that Britain does indeed have a contingency plan if the Greeks should default they haven’t inspired confidence and we could be in for a rockier ride than necessary. This is particularly true if the government has the interests of banks at heart, and is looking to lessen their pain, rather than the interests of the nation and protecting the people as much as possible from the inevitable fall-out.

HERE’S an interesting little graphic showing that in 2005 Britain had 42% debt as a percentage of GDP; by 2010 this had risen to 80%. Greek debt to GDP ratio stood at 100% in 2004 and in 2010 was 143%. We also have a deficit to GDP ratio of 10.4%, only 0.1% different to Greece, yet our interest rate spread is 0.3% compared to 15.0% for Greece.

And here’s that graphic again – I’ve posted it about five times now but I think it’s important. It shows the scale of inter-debtedness (if there is such a word!) between countries. I’m no economist but until someone puts me straight I can’t see why debts can’t be offset against each other.

(Click to enlarge)

Two new ones:

The IMF’s answer to this financial turmoil is for deeper & faster integration of the EU – just what they wanted. Acting Director John Lipsky: “The euro area needs to strengthen economic governance and may need to be more intrusive in terms of national structures.”

The next day, life went on in America. There was no shocking front-page cover story or award-winning photograph to spark a national debate… let alone propel droves of fed-up citizens to flood the streets demanding change.

Rather, the New Hampshire courthouse cleaned up his charred remains and meticulously scrubbed the floors to eliminate all trace of the event. 24-hour news networks ran a quick blurb in their scrolling tickers amid more important coverage of the Miss USA beauty pageant and President Obama’s Father’s Day plans.

In other words, business as usual… suggesting that if there is, in fact, going to be a fight for the soul of the country, it’s a long way off, and many more degrees for the boiling frogs who are stuck in the pot.

"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or your arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that you were our countrymen."